Credit crunch, weakening pound, and stagnant property market in the UK have all had an effect on the confidence of UK buyers into the French property market. None the less, we find that there is still a healthy volume of buyers prepared to bear these conditions and who are sufficiently motivated to find a home in France. Lifestyle continues to be the principal motivation. On the positive side for purchasers there is still a generous supply of property and as a result there is both choice and value to be found in the market.
The French market is still active and we are seeing an influx of buyers in the South West from both Northern and South Eastern France. The impact of the Credit crunch on the French market has been relatively slight. This is largely due to the controls on borrowing which are imposed by law. Borrowing periods continue to extend with the average mortgage period now slightly over 21 years and many new mortgages being offered over 30 years.
We expect to see the gap between English and French property values continue to narrow through the year. The French market is officially still growing in value at a rate of 2,7% per annum.
With the current insecurity in banking circles and financial markets we expect growth to remain fairly flat through 2008. We have concerns that there will be some instability in the buy to let market in areas where supply has outstripped demand.
Market report end 2007 beginning 2008.
The year ended with supply of property remaining high and level of demand steady. During this period we have seen sustained demand for quality properties in the 5-800 000 euro price bracket and within this range supply has easily been met by demand. Overall the market has measured growth for 2007 at 3.8%, slightly below the predictions we made in 2007. This is in part due to changing expectations from sellers concerned about the unsettled financial markets and fallout from the credit crunch in the United States.
Pricing
We have found sellers to be far more realistic about prices and have been able to renegotiate numerous mandates to reflect this mood. This has resulted in a greater proportion of properties we have for sale being offered at fair market value, thus providing purchasers a wider choice than has been common in recent years. In addition, a some English sellers have been ready to accept a reduction in asking price when repatriating the capital as they have been able to benefit from the stronger euro exchange rate.
